Baney Corp. v. AGILYSYS NV, LLC
773 F. Supp. 2d 593
D. Maryland2011Background
- Baney operates 17 hotels and contracted in 2005–2007 with Agilysys for the V1Net Property Management System across Baney’s locations.
- Baney alleges the V1Net System had persistent defects (accounts, reservations, performance, security) and that the version installed was a beta, not a finished product.
- Contract 1 covered two sites; Contract 2 expanded the same terms to all remaining Baney locations and stated acceptance by Purchaser governs the contract.
- Baney signed Contract 2; Agilysys later produced a signed copy, though Baney disputes timing/signature, arguing Contract 2 may be unenforceable if unsigned.
- MDUCITA governs the contract, with waivers of implied warranties and limitations of damages stated in the written contracts.
- The Amended Complaint asserts two contract-based sets of claims (Counts I–III, VI–IX) and two tort claims (Counts IV–V); the court addresses dismissal and partial survival/survival with discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Counts VII-IX (implied/express warranties) fail as contract terms | Baney contends UCITA allows implied warranties beyond written terms. | Agilysys argues only the written warranties exist and exclude implied warranties. | Counts VII-IX dismissed; warranties limited to written terms. |
| Whether Counts IV-V (fraud/negligent misrepresentation) survive | Baney claims misrepresentations regarding ease of use and beta status. | Misrepresentations are puffery or non-actionable and lack reliance. | Counts IV-V dismissed. |
| Whether the sole remedy clause affects damages and related limitations | Remedies and damage limitations should be interpreted together; sole remedy may fail of its essential purpose. | Damages limitations independent of the sole remedy should survive. | Damages-limit provisions remain tied to the sole remedy; summary judgment denied on this issue pending discovery. |
| Whether rescission (Count VI) is appropriate or should be dismissed | Rescission available due to material breach. | Rescission requires prompt return of the consideration; Baney cannot immediately return software. | Count VI denied for now; discovery ordered to assess feasibility and equities. |
| Whether Counts I-III (contract interpretation) survive, and whether discovery is needed | Contract interpretation under UCITA governs; written terms control; performance may show other terms. | Interpretation is a matter of law and the written contracts govern; performance cannot alter terms. | Counts I-III survive pending discovery; summary judgment denied for now. |
Key Cases Cited
- Dairy Queen, Inc. v. Wood, 369 U.S. 469 (U.S. 1962) (breach of contract usually jury question after contract interpretation)
- Technographics, Incorporated v. Mercer Corporation, 777 F. Supp. 1214 (M.D. Pa. 1991) (performance may form contract where written terms are unenforceable)
- InfoComp, Inc. v. Electra Products, Inc., 109 F.3d 902 (3d Cir. 1997) (contract formed by performance; terms governed by applicable law)
- Riegel Power Corp. v. Voith Hydro, 888 F.2d 1043 (4th Cir. 1989) (sole remedy repair failing its essential purpose informs summary judgment)
- Milkton v. French, 159 Md. 126, 150 A. 28 (Md. 1930) (puffery not actionable as fraud)
- McGraw v. Loyola Ford, Inc., 124 Md. App. 560, 723 A.2d 502 (Md. Ct. Spec. App. 1999) (indefinite generalities or puffery not actionable as fraud)